The thesis for buying the stock had seemed simple. War or peace, Russians would always buy food. Yet some investors’ path from purchasing stock in supermarket chain Magnit PJSC, to seeing it unexpectedly sold, seemingly returned and ultimately refunded has been far from straightforward.
EToro and rivals including Robinhood Markets have achieved high valuations on the back of explosive growth “Your position was closed due to stop loss,” an online customer-service representative told one investor on March 2. That investor, and othersinterviewed, requested to remain anonymous because their communications with the company were private.
The company said it had opened new positions in Magnit for customers with the same terms as before. A few hours later, however, EToro came back with a different message. Magnit shares were going to be sold the next day, on March 4, at the last tradable rate due to the “severe lack of liquidity in the underlying markets.” That ended up being US1.24¢.
One confusion appears to be over what at least one investor held. In an exchange with EToro, the individual asked why the security was being sold as they did not hold it through a contract for difference, where downside losses can balloon as values fall. In this case it was a simple share held without borrowing against the stake.The message back did not appear to make sense, saying “market conditions could cause your equity to become negative.